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Power Lunch

News/Business. Sue Herera, Tyler Mathisen. Today's news on the economy, markets, real estate, media and technology. New. (CC)

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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704

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480

TOPIC FREQUENCY

Cyprus 20, Us 13, Russia 8, Europe 8, U.s. 8, Ben Bernanke 7, Tyler 6, Washington 5, Steve 5, Caterpillar 5, Michelle 4, Neil Irwin 4, Steve Liesman 4, Moscow 4, South Korea 4, Bernanke 3, S&p 3, Ben White 3, Julia 3, Nyse 3,
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  CNBC    Power Lunch    News/Business. Sue Herera, Tyler Mathisen. Today's news on  
   the economy, markets, real estate, media and technology....  

    March 20, 2013
    1:00 - 2:00pm EDT  

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is what we're after anyway. final trade time. ennis, you're up. >> i mentioned fapharmaceutical names earlier. it's abbott labs to me is one of the cheaper names. >> pete? >> ennis is right but go with blackstone. it's going higher. >> doc? >> state street. >> murph? >> ingersoll rand. >> follow me on twitter. have a great rest of the day. "power" starts right now 37. >> thank you. we start with breaking news all over the financial world. the markets are up big across the board and, in fact, we're closing back in on the all-time s&p high. we're waiting on the fed's decision. that's less than 60 minutes away. plus, big news from russia and cyprus as that nation's financial structure is on the brink. the implications for europe and the u.s.? well, who knows. tyler is going to lead us through that. we're going to start with bob
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pisani. risk seems to be back on in the market a little bit. >> that's a good point. for a long time the bears have been insisting that the global economy is not as healthy as this teflon stock market in the united states would indicate, and now they've got some ammunition. two companies from fed ex and from caterpillar. now, caterpillar had dismal three-month sales numbers. really shocked a lot of people. fed ex, of course, had disappointing earnings situation, lower than expected international volume. now people are saying, see, we told you. here are who big companies who are saying it's not as big as everybody said. deere got a downgrade from wells fargo. i'll talk more about that in the 2:00. a little bit of good news on housing. keeps rolling along. lenore, 34% increase in building. >> we'll see you back in a few minutes. ty, we'll send it back up to you. >> thank you very much. bob just gave you a very clear
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shot at the market picture, so what's driving it? well, obviously three developing stories and we're going to cue you in on all of them right now. the fed, steve liesman is in washington. russia's financial overtures toward cyprus. steve is live in moscow and then there's cyprus and the impact there on the rest of europe and the globe. michelle caruso-cabrera has made the trek to that small island nation that is right now ground zero for europe's financial problems. michelle? >> reporter: hi there, tyler. the latest is the president says he's going to meet with parliament tomorrow morning. there's still no plan here. in fact, you heard about plan a which was to tax deposits. now we have heard that plan b has been rejected by the troika as well. cyprus government said to the troika, their european partners who they want them to lend money to, they said to them, listen, instead of taxing deposits why don't we do this instead. we have a pension fund, we'll raid it, take the cash, turn it
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into bond and we'll pay it back over time. the troika said that doesn't do anything for you. you still have liabilities. then they said we're also going it try to sell one of the bad banks. and the fact of the matter is if the bad bank were sellable, people like chris flowers and wilbur ross and tim collins would have been here a long time trying to buy it. they said maybe we'll split it up, divide it into the good bank and bad bank. we'll sell the good bank to the russians and the troika said selling the good bank is the easy part. what are you going to do with the bad bank? none of that is going to work. you will hear more about what the hopes are for russia from steve in a second. because plan b has been rejected, this is the stark choice cyprus faces. they can either go back to taxing deposits or they can leave the euro or they can consolidate their two bad banks, that's a fancy way to say you shut them down, you wipe out all the equity, you wipe out all the bondholders and then even the ininsured depositors could face
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losses of 30% to 40%. in the meantime, the banks are still shut. they have to make a decision. people on the street are very calm and they seem unaware of the drama they could potentially be facing. >> michelle, thank you very much. and as michelle mentioned, much of this story pivots north to moscow and that's where we find our steve sedgwick for more on the other part of the story from russia not with love, with money. and lots of demand. steve is live in moscow. steve? >> reporter: maybe. maybe, tyler. maybe there will be money from russia, but maybe russia is playing a canny game here and it's going to wait and see what happens. the russians have enormous skin in the game. i mean, the bilateral trade and bilateral money transfers in 2011 according to moody's between russia and cyprus and back and forth was a quarter of a trillion dollars. the russians hold around about $30 billion plus in the bank accounts here in cyprus, so you can see the kind of money we're talking about. the rugs have got enormous business activities. it's kind of like an offshore
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financial senscenter for the russians? certainly they want to see they get their money back. a lot of assets are held by the likes of vtb, one of the big russian banks with $13 billion in assets according to some estimates in banks in cyprus. secondly, maybe they're going to extract something like a naval base. many have talked about the aspirations of the russians in that part of the mediterranean. and cyprus has offshore gas rights which potentially from 2019 could be a poe nan za bonanza. the question is what happens if the russians don't play ball? well, they could just stand back and actually watch this one implplode and try to pick up so of these assets at a later date because they are really, really upset with the european union for not bringing them in, into these negotiations given the fact that the russians have already lent cyprus 2.5 billion
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euros in 2011. so a lot of question marks there. let us not forget just a tiny issue of the russian supply 36% of the gas which goes into the european union. if they get any more upset with the european union, it could be a very cold winter. >> on any other day, we'd be leading with the fed. the fed making a big move today, moving its decision time to 2:00 p.m. sharp. used to be sometime around 2:15. that's about 30 minutes later after that decision by the way we'll get the news conference, quarter news conference, and our steve liesman, our senior economics reporter, is live in washington. steve? >> reporter: yeah, tyler, and that clock is going to be exactly right. at 2:00 p.m., this is a historic day when the fed for the first time puts out the statement at a time certain. before it was usually around 2:15, and also the economic projections come out with it. there are a lot ever reasons behind this. one thing the fed gets from this is it emphasizes the importance
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of the forecast to the policy that's coming out along with it. that really now they're joined as one. i think the fed has been after that idea for a long time. no big change expected in policy. want to give you an idea of what might be discussed behind the scenes today that we'll learn about in the minutes. a big question about how real is the decline in unemployment? we will get a new forecast, expect those unemployment numbers to come down for the federal reserve since their high end is already the existing number of 7.7%. is the sequester factored auint the outlook? many economists think not. we have had michelle and steve on the issue of cyprus. the fed has already said global financial strains are a downside risk. we'll see if they heighten that language. finally, a lot of talk about costs and the cost of continuing quantitative easing and that's going to be a big issue. it's not going to change policy. and i want to share with you a comment from steven stanley who put out a report earlier who
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said markets essentially have overreacted to the dissent and early in the year but have seen enough in recent weeks to recognize that the doves remain firmly in charge. take a quick look at the fed's balance sheet which had been constant for much of 2010 and 11 and has begun increasing with those $85 billion in purchases of treasuries and mortgages that the fed is expected to continue today. tyler, i have to say if you told me one day you'd be leading your show with three reporters, one in moscow, one in cyprus, and one in washington, i'd say you were crazy, but this is history. >> and we span the globe on "power lunch." see you in a little bit. we told but the big news on the day on this fed day, about fed ex shares. they are taking a hit. they missed their estimates. right now at this point fed ex is off about 5%, almost 6%. the profit fell 31% as customers chose less expensive shipping methods. fed ex also saying it will cut
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capacity, t to and from asia. lennar easily beat the street. posting strong revenue growth thanks to higher delivers and home prices moved back. and that stock right now is up better than 4% on the trading session. it may be the best case yet of how much damage a state sponsored cyber attack can do. south korea reporting massive outages at media companies and financial firms, including some banks. south korea's internet security agency has said it doesn't have any evidence of external attacks yet but you can bet they're looking pretty hard. internet experts suspect north korea. eamon javers covers the beat for us. we continue to see this kind of disruption in these countries, can that be seen in essence as an act of war? what will cyber attacks like the one in south korea be seen as in
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terms of the future? >> it's a really good question, sue. you are getting a taste in south korea of what these cyber attacks might look like if they were to hit the united states in a very, very big way. when you talk to the experts here, they say whether a cyber attack is an act of war, quote, unquote, is going to be as much a political decision as it is some kind of regulatory or formal legal decision. you know, as a connecticut attack, a physical attack like a pearl harbor, i spoke to one former high ranking intelligence official. he said my guess is any responses will be like our early responses to terrorism. the response to the embassy bombings in africa were treated as law enforcement issues, but 9/11 turned our responses into the global war on terror, and the congress is still debating the president's authorities in that arena, the drone debate. whether a particular cyber attack meets the threshold of being an act of war is likely to depend very much on the political and military situation at the time that that happens and not necessarily on any
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definition that you could put in place up front, sue. >> speaking of that, we know that treasury secretary jack lew is this china this week and a big part of his agenda is addressing these cyber attacks. you have news on the man that chinese group that reportedly has been sitting those u.s. sites recently, including some of the banks. >> yeah, that's right. i have been talking to the folks at mandian. it's the private american consulting firm that put out the ground breaking report in which they named the chinese army unit they suggested was responsible based in shanghai for attacks on american companies. they are telling me they, in fact, are experiencing a denial of service attack themselves. let me give you some details from them about exactly you who they describe this. they say they saw agres sif reconnaissance of their computers after they put out that chinese army support and a sustained ddos, distributed denial of service attack, followed over the past ten days.
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that's been ongoing. the attack appears to come from china but mandiant is not assigning responsibility to that unit. they say so far they have seen no data breach or damage done from the attack but, guys, you can see there's a little bit of a low-level cyber war going on right now. we see punch and counter punch being done on the internet in real time. >> eamon javers, thank you for that report. michelle has just confirmed now that sip pri yot banks are going to be closed until tuesday of next week. imagine if your bank had been closed for seven consecutive business days as those banks in cyprus apparently will be now. so the cyprus banks now closed at least until tuesday. try to go to a real estate closing with that as your problem. we got a couple very good stories coming up for you here on "power lunch." we're going to begin with coach seats. coach seats on airplanes getting squeezed. well, they're already pretty
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tight but squesed away by business class. what it means for flyers, investors, and anyone who still flies coach as i so often do. then, where is it? what caused it? what happened? what's going on? we'll explain. look at that. heads and fed heads and market watchers, there's a new decision time. 2:00 p.m. eastern sharp. the countdown is on. keep watching, america. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪
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investors are investors are dialing into blackberry. it's up almost 8%. morgan stanley upgrading the stock to overweight from underweight. that's a big move. raising its price target to $22 all the way from $10. morgan says the shift to the blackberry 10 should help improve gross margins. blackberry stock is up more than 35% this year. ty, who would have thought? >> i tell you, sue, that chart tells you it's not so much what you buy but when you buy. >> you got it. >> big airlines want big money and frequent flyers want bigger seats. so coach seats are becoming harder to come by, especially on cross country flights. talk about getting squeezed. phil "first class" lebeau taking flight for news chicago. >> if you're looking to be upgraded on some business class seats, that will be tougher as well. take a look at the transcontinental business class routes. we're primarily talking about los angeles and san francisco to
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new york and boston. in general the fares for business class about 50% higher than coach, and it makes up about 11% of the seats on flights making those runs. well, united is now offering live flat seats for its business class in certain transcontinental routes. they just started it this week from los angeles to new york. the flights will have fewer business and first class seats going from about 36 down to 28 just lie flat seats. why are the airlines doing this? this comes down to trying to have that premium service between the coasts so they can increase revenue. this is all about getting more money from those higher paying passengers. transcontinental premium service is targeting in specific corporate customers in industries like financial services and the entertainment industry who will pay for the lie flat seats. >> those industries pay for premium cabin seats. that's the battle. that's where the profit is, and that's who the big three airlines, united, delta, and
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american, are battling it out. it will be interesting to see who wins long term. >> and there was one more airline getting into this battle. today jetblue announced it is going to be adding premium service on its transcontinental flights starting next year and real quick guys, we want to remind you tomorrow on "the closing bell" we will be hearing from the ceo of delta, richard anderson, sitting down with maria bartiromo to talk about the state of the airline industry. you don't want to miss that interview. if you have been looking at the airline stocks, including delta, they have been off to the races over the last six months. guys, back to you. >> phil lebeau, thank you very much. overseas travelers say they are going to avoid the u.s. because of long wait times and inefficient entry procedures. one in three of those travelers say the u.s. is the worst in terms of getting through customs and border protection. 44% of foreign business travelers say they will refuse to visit the u.s. in the next five years.
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sue? ty, take a look at this video. on the hill today -- nope, just kidding. this is video from the ukraine. a giant brawl broke out in the middle of a parliamentary session. one of the speakers began to speak in russian and to ukrainian nationalists, that's a definite no no. the two sides called each other fascists. whatever. it's awfully good video and it certainly makes us appreciate the normal dysfunction of the american political system. wow. all right. countdown to the fed's latest decision on interest rates. its new economic forecast, ben bernanke news conference, how traders are making their moves ahead of the announcement. plus, "the power pitch." >> coming up, "power pitch." startups give us their 60-second pitch. >> i'm co-founder and ceo of next door.com. >> and we given you insight into the fast-paced porld of venture capital. >> the question comes down to scaleability. >> do these founders have what
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[ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. i'm i'm tyler mathisen and this is "the power pitch." founders get 60 seconds to pitch their company and then our panel of experts will provide insight on the business model and the marketplace giving you an in-death look at the dynamic world of venture capital and entrepreneurship. today we have the ceo and founder of next door, the former
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coo of shopping.com, wants to use social technology to make your neighborhood a safer and happier place for you to live, and here is his power pitch. >> i'm nirav tolia. next door is the free private social network for the neighborhood. we all use social networks. facebook to connect to friends and family, twitter to follow people and topics that interest us, and linked in to manage our business lives. but what about that part of our identities that has to do with where we live? where our children go to school? our local communities? our neighborhoods? that's where next door comes in. using next door, neighbors create free and private websites where they can easily connect and communicate about the things that matter. already over 6,000 neighborhoods in 50 states are using next door to talk about straightforward things like organizing a block party or finding a great recommendation for a dentist to
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more personal things like asking for help in finding a lost pet to critical information like learning about a rash of break-ins or other things related to crime and safety. it's easy to get started. go to next door.com and entur your dress and in no time you'll be building a stronger and safer neighborhood. >> he's on the right side of your screen. he can't react to our critiques just yet. he will get his chance though. on our panel, julia boorstin, cnbc's social media and entertainment correspondent and paul lee, a partner at light bank. paul has led the firm's investments investments. paul, go ahead. what are your initial reactions to this concept? >> huge opportunity. obviously i agree with the entrepreneur in terms of neighborhoods being a fundamentally different social network. the question really comes down to scaleability. like how are you going to knock down neighborhood by neighborhood. and the penetration there while difficult would create significant barriers to entry
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for the competition. i think it's really interesting. >> local and hyperlocal seems to be a trend in this world that we're looking at julia. your reaction? >> i think the interesting thing here is going to be how they really distinguish themselves from the other tools. you could create something similar to this with google circles. you could create a private group within facebook. the question is how they will get people to sign up for a whole new social network and i wonder if there's an opportunity to layer them on top of facebook. >> i wonder where the revenue stream is going to come from? advertising, some sorm of membership? we're going to ask him actually a few questions and you are going to get a chance to defend yourself. so julia, why don't you kick it off. >> i guess the question is, what is your business model? do you have any revenue at this point? >> we have no revenue at this point. we're completely focused on bringing the magic of a website to neighbors everywhere. as you mentioned, local advertise something a tremendous opportunity. in 2006 local advertising peak
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at over $100 billion of spend, but the traditional mechanisms for local advertisers to use, yellow pages, newspapers, radio, those are on the decline. we think it's very natural for that money to flow to next door. >> paul, what would you like to ask? >> i mean, what are you offering that you couldn't get through either yahoo! groups or facebook? >> so the important thing to know about next door is that it's 100% built for the neighborhood. so, for example, relative to any other site out there, on next door you have to verify your address before you can join. it's just about you and your neighbors, and every piece of functionality we've thought about relative to what do neighbors want. >> there are other websites in my town there's one called bar ris th barista net. how will you differentiate yourself? >> we're 100% focused on serving our members and creating the best experience for them. i haven't heard of the site you mentioned, but next door is
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already live in over 6,000 neighbors in 50 states. so so far we're off to a pretty good start. >> the moment of truth. you have heard what they had to say and paul and julia, it's time for us to vote. are you in or out on next door? >> well, i think the market opportunity is huge. in terms of local advertising, from our experience with groupon, it's harder than it looks. so, you know, in terms of scaling that side of the operation i would say let's not take that as a given. but given the background of the entrepreneur who has had multiple exits and really the hard work they've done in terms of creating barriers to entry, i'm in. >> i for one would like to try it out to replace the annoying yahoo! list serve in my neighborhood. i'm in. >> i'm in as well. looking at the entrepreneurs background and his co-founders and the venture capital money, i think there are some smart people backing it. i think you're one of them. thanks for joining us and to our panel. that is "the power pitch."
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>> there's another power pitch. what do you think? are you in or out? three ins from the panel. but we'd like to hear from you. are you in or out on next door? head over to powerpitch.cnbc.com and vote in our poll. let us know if you think you have what it takes to face the "power pitch" panel. hey lipton. >> there's hope the french drugmaker could get a positive recommendation from european regulators for its multiple sclerosis pill. some saying it could mean $260 million in terms of peak sales. up 2.5%. >> all right, josh. it's 28 past the hour. the countdown is on. in about 31.5 minutes the fed will tell us its latest interest rate decision and latest economic forecast. ben bernanke's news conference will come about a half hour after that.
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gold, gold, big caps, midcaps, small caps, oil, tech stocks,
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the dollar. what the fed will say at 2:00 p.m. on the dot will impact everything you trade. there's no other place to turn. cnbc's special countdown to the fed decision rolls on right now. >> and we are counting down to the fed's latest decision on interest rates. less than 30 minutes away from a decision now. the pregame is on. bob pisani is at the nyse, seema mody is at the that is dak. we' we're going to start out with sharon epperson. >> we're highly anticipating what the fed is going so say and now that we've seen some of the concerns over cyprus and the eurozone wane a little bit we're seeing a little bit of a waning in the buying of gold. the fact we're looking at gold above $1,600 an ounce is significant. we're continuing to watch what happens with other metals as well. perhaps we'll see more stimulus.
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maybe that's why some of the other metals are higher. back to you. >> thank you so much, sharon. let's get the trading akts. bob is next to me on the floor of the nyse. up 49 to 50 points. we don't anticipate a big change by the fed but given the environment around the globe this is important. >> i don't either. nobody around here seems to anticipate a big change in the fed policy. some are expecting they might tweak up their gdp forecast. that's a probability. probably we'll expect to see inflation expectations well anchored. i think you will hear that phrase as well. there's a problem with the stock market, although large parts of it are being ignored. fed ex and caterpillar had rather disappointing commentary and this is giving a lot of help to the bears who have been saying the gloge econobal econot as strong as the u.s. stock market is indicating here. the markets are ignoring fed ex and caterpillar and that's making traders say that's because all they care about is the federal reserve and what
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they have to say. wells fargo did downgrade another couple big machinery names, deer and agco. they downgraded that because they thought corn prices would be declining so sales would not be increasing as much next year. >> thank you very much, bob. to seema mody at the nasdaq. she's following the big movers there. >> all eyes on thef foc announcement. look at adobe hitting a 52-week high. it reported strong earnings. apple though not joining in today's rally. decreasing its price target writing that apple could lose smartphone market share given the recently launched high end android smartphones. speaking of smartphones, take a look at blackberry. a morgan stanley says there may be room for niche midrange players. sue, back to you. >> thank you very much. to the bond market where rick
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santelli is tracking the action on the interest rate front. >> let's look at three major areas, three major charts going back to the last meeting to see what they've done. if you look at our ten-year, we're down 6 basis points since the last meeting. if you look at ten-year boon, they're down 32 basis points since the last meeting and you don't even believe what the euro did. it was at 135 in the next meeting. we're under 130. of course, we're going to have the statement and the head therapist for the economy, ben bernanke, will head to the casting couch and maybe those statements will move the statements. tyler, back to you. >> thank you very much as always. countdown to 2:00 p.m. rolls on and that, of course, will be followed by chairman bernanke's news conference that hits at 2:30. on our panel right now to discuss what's ahead for us, ben white, josh boke, neil irwin, a cl
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columnist with "the washington post," and michael santoly, yahoo!'s finances senior comes. ben, we've got obvious cross currents. the sequester, what's going on in europe on the other. how do you expect the fed will take those two things into account and what does it make the fed more or less likely to do? >> all of them make the fed more likely to be dovish, continue to be incredibly dovish. you won't see any change to the qe-3, the $85 billion in monthly asset purchases. i think they will speak to the fact cyprus is a concern. it's not helpful. sequestration is taking a little bit out of economic growth at this point. maybe washington comes to a deal to eliminate the sequestration hit, maybe it doesn't. maybe we get a debt ceiling fight down the road. washington still hanging on this economy to a great degree, it means the fed -- also nowhere near the unemployment target. there's nothing in the numbers
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to suggest the fed would be anything but completely dovish. >> sue? >> josh is going to join the conversation now. i think basically ben set it up for us perfectly. it does seem to be the u.s. fed versus the rest of the world. and once again mr. bernanke is presented with a crisis in another part of the world which may have to influence what he does here in the united states. >> that's exactly right. cyprus is going to play a big role in how he deals with europe. i think the fed wants to be curbs. if it's going to make any kind of move, it wants that move to be successful. that's going to be a guiding principle going forward. we have to remember there's a lot of forward looking events like that debt ceiling issue which is going to crop up in the middle of may. how we handle that will influence the economy going forward. we have to think forward when we read through the fed. >> let me turn to neil irwin. neil, the fed chairman has been asked before and he has routinely swatted away the questions like an annoying fly about whether he would accept or
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is even thinking about another term at the fed. what do you think is going to happen? he's got ten months to go. >> look, it's hard to imagine that he wants another term. he's worked very hard for the last seven years and counting. he's tired. he's fought the crisis. he's dealt with the aftermath of the crisis. i think he would just as soon get a nice lucrative book contract like tim geithner did and have a little more leisurely pace. this crisis, this difficult time isn't going away anytime soon. he has a difficult ten months ahead. i think if he is asked, he will deflect once again and certainly not pledge that he would really consider it if he gets the offer. >> all right, mike is with me here on the floor of the nyse. mr. bernanke might not want another term but there are a lot of people on the floor who would like him to take another term given the fact that every time you turn around, there's another financial crisis. yet our stock market is not as jittery as one would think. >> it's not at all. i think at this point fed policy as far as invests and stocks are
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concerned is the context. they're just going to assume it's going to be the same supportive mode unless they hear differently. i think there's a little hypersensitivity to any hint the fed will be less generous just for context a month ago the february minutes seemed like it spurred some people. one year ago the minutes from the march meeting released in early april were the things that sparked the april sell-off because the fed was showing signs in not being interested in another round of qe. it kind of shows you we've been through this cycle before of strong economic numbers coming in the winter and the fed is basically had this economic forecast that was not met by the actual economic growth and we've once again had more help. so to me it's not a big catalyst today but basically you want to hear the same message that the fed is there. >> well, it was last spring that we had that jolt and it's the first day of spring today so who knows what will happen. >> chairman bernanke remember that is. that's the key thing. >> of course he does. stay with us, gentlemen. we're going to take a quick break. just minutes to go before the big fed decision on interest
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rates. more predictions and analysis on the way for you. plus debt-stricken cyprus is said to be seeking help from russia. do you trust russia? that's the question of the day. go vote, quick. [ male announcer ] this is joe woods' first day of work. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense.
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coming up on "street signs" at the top of the hour, there's really only one thing you need to know about our show and that is that it is a huge fed show. we have steve liesman inside the fed right now. he's embedded inside the lock up room for the decision. we've also got a star panel lined up for you for instant market reaction to that decision which all builds up to the 2:30 news conference which, of course, we will be taking live. it's all happening on our show, top of the hour. you must join us. we're going to start five
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minutes early which is 1:55 p.m. eastern time. all those things happening on "street signs." back to you on plumpl. "power lunch." >> general mills hitting a 52-week high. the cerealmaker beating earnings estimates and raising the outlook for the year. that forecast is still largely below wall street's forecast. williams sonoma also hitting a 52-week high. we're also watching hewlett-packard and starbucks, both of them meet with shareholders today. and a programming note, starbucks ceo howard schultz will be on "closing bell" after the big event first on cnbc. the fed rate decision just minutes away now. the $4 trillion question, where's the exit door? [ male announcer ] you are a business pro.
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has ae fed the fed has a new decision time, 2:00 p.m. eastern on the dot. the runup and countdowns are on as we await word from fed chief ben bernanke. keep it right here on cnbc. >> and we know that's where bill gross of pimco is patching.
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he was not available to talk today but it doesn't mean he wasn't available to comment. he did tweet. he said central bankers a century apart. lend freely at a penalty rate. bernanke, lend freely at a subsidized rate. even the fed is pumping up the action today with this tweet. watch live today, a fed tweet! 2:30 p.m. press conference with fomc chairman bernanke. let's welcome back our panel as we count down to the fed decision. ben white, josh boak, kneel nein and michael santoli. does bernanke have any real dissenters on this fed board and who is it if he does is it. >> he has esther george, the president of the kansas city fed who is dissenting this year. i suspect she will again today and then some of the people not voting are very much in the
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hawkish camp. that's richard fisher, charlie plosser. the thing is bernanke for now has control over this federal open market committee. the governors are on his side. all seven of them, they vote every meeting. he has enough of critical mass of the regional presidents. the question is will we see dissents later, maybe a year for now. jeremy stein has expressed worries about asset bubbles. >> ben, any dissent there from you? >> no dissent from me. maybe bullard comes out with a dissent. the most he gets are two. there's not a lot of resistance. he dominates the open market committee for now. there's no real reason for the hawks to gain a lot of traction as we've talked about, see prcy sequestration, debt ceiling. you have seen some economic bright signs. it's just not enough to overcome all the head winds. very little dissent. i don't think they're near the exit door. >> michael santoli, the market
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seems to sense they're nowhere near that market door either, and those who have dissented like mr. fisher, their worries are inflation but we don't see any evidence of that. >> no, we don't. we'd consider ourselves lucky if those concerns go from the hypothetical to the present because it would mean the economy has some momentum. so i do think you're right, really has not been price inflation pressures at all. really right now you have some credence to the idea we're in a little bit of an economic sweet spot at least for this moment. i think the risks are still to growth, not inflation, and you have to torture the numbers and say maybe there's a credit asset bubble. maybe people are overpaying for things like corporate bonds and things like that. but at the moment that doesn't really overcome the larger economic concerns. >> josh, if i can turn to you now, what do you ideally from your vantage point want to hear from the federal reserve today? >> i think we need to get a good sense of what they see as far as
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job creation going forward and whether charles evans kind of that six-monday standard he set of more than 200,000 jobs being created any hints as to whether that's going to be what could propel us to an exit door. on top of that, i want to see his perspective on fiscal matters. bernanke said the fiscal issues are the big problem facing the economy. he's told that before congress. how does he see the budget scenario playing out. >> neil irwin, let's play the fun game. you mentioned several of the members of the open market committee, several of the nonvoting governors, if ben bernanke chooses or is not renominated as fed chairman, might the next fed chairman come from that group or from somewhere else? >> janet yellin among the current governors is the most likely to get the job. she has some real competition. there might be a sense it's time to get outside the kind of existing fed lineup and bring in some new blood. >> how about tim geithner there?
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>> can he really doing that? what new bloods a the -- has the experience? >> right. so larry summers is very experienced. roger ferguson was vice chairman under alan greenspan. there are options out there. tim geithner is in retirement. he says he doesn't want it but you never know. >> that's an interesting point, ty. >> exactly. is there anything, ben white, in the politics of that kind of choice that could lead the president to move one way or another and could the next fed chairman face any kind of challenge in the senate? >> i doubt there would be a big challenge to the next fed choice unless it's a controversial one. i agree janet yellin is the likely choice and she would be the first woman to hold the job. there would be some pressure on the administration to go with her. folks have talked about
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geithner. >> he has his house for sale in bethesda. >> but when geithner says he's not going to do something, like write a book, eventually he does something. it's a natural job for him. >> it really is. all right. thanks, guys. prert it. ben white, josh boak, neil irwin, great book by the way, and michael santoli. >> it's been an interesting hour and interesting hour or so ahead as we leave the field here and turn it over to the folks at "street signs" five minutes early getting ready for that 2:00 p.m. announcement. that will do it for "power lunch." >> cnbc's special report fed decision on interest rates begins after this quick break. it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work.
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today on today on "street signs," will interest rates are change in the fed decision is in at a new time. ben bernanke faces the press. steve liesman is there. today on "street signs" 2:00 p.m. eastern on cnbc. >> welcome to spring and welcome to a special fed day edition of "street signs." we're counting down to the fed decision on rates. just five minutes until steve liesman brings you the decision and the reasons behind it. >> indeed. we are just minutes away from ben bernanke's news conference. we have an all-star panel ready to break down all of the headlines for you. we have diane swan, chief economist, ken, mad money's jim cramer and guggenheim's scott minor. >> let's get a check on the markets prefed. the last few fed meetings certainly have followed a
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certain script, but we know that the economy has gotten better. the fed will have to at least address some of that data but now we also have a reflare-up in europe. right now the dow is up 44, nasdaq is up 18. the s&p is up 8. it's been a very narrow trading range market today, but, hey, post-fed you never know. >> you never know. let's get right to our panel. diane, it's always ladies first here on "street signs." are we in for any surprises today do you think? >> i think the key things to look for is the acknowledgment of a better economy, but also what next shoe could drop on fiscal drag. much of the income that was pulled into the end of 2012 is people hedged their taxes and it was spent in january and february which may have masked some of the fiscal drag with the uncertainty of the sequester, and as you mentioned, europe. it's first day of spring and we have another crisis in europe. >> jim, another all-time high for the dow. eight points away from the high on the s&p 500.
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i guess the market has somehow climbed the old cyprus hill. >> i like that. here is the problem. you look at today and you say caterpillar, geez, business down so big. down 12%. deere, another day, these are great manufacturing companies. fed ex. fed ex, if you need it the next day, no, you don't. these would be the economy to me. and then i look at the housing permits, and i look at the bills, and i look at lennar and i think, boy, the fed has a tough job, just a tough job because a lot of the economy is terrible. employment is not that great but mortgage rates are so low that people are building houses again. they have a tough job. i don't know how they're going to pull it off. >> there's so much data to sift through. it's hard to know what to latch onto. >> let's talk about cyprus. the interest rates were headed higher. if

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